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Lost in translation

Summary:
More than 10 years ago, Forbes reported: China Daily reported Friday that unnatural deaths have taken the lives of 72 mainland billionaires over the past eight years. (Do the math.)Which means that if you’re one of China’s 115 current billionaires, as listed on the 2011 Forbes Billionaires List, you should be more than a little nervous. I seem to recall that I criticized this article, but I cannot find the post. In any case, it’s hard to keep down fake news. Just a couple months ago the Financial Times repeated this nonsense: Citing statistics from the Chinese press, the article pointed out that 72 of the country’s billionaires had died premature deaths in the previous eight years. The original piece in China Daily, which is published by the Communist party,

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More than 10 years ago, Forbes reported:

China Daily reported Friday that unnatural deaths have taken the lives of 72 mainland billionaires over the past eight years. (Do the math.)

Which means that if you’re one of China’s 115 current billionaires, as listed on the 2011 Forbes Billionaires List, you should be more than a little nervous.

I seem to recall that I criticized this article, but I cannot find the post. In any case, it’s hard to keep down fake news. Just a couple months ago the Financial Times repeated this nonsense:

Citing statistics from the Chinese press, the article pointed out that 72 of the country’s billionaires had died premature deaths in the previous eight years. The original piece in China Daily, which is published by the Communist party, provided the details: “Among the 72 billionaires, 15 were murdered, 17 committed suicide, seven died from accidents, 14 were executed according to the law and 19 died from diseases.”

Doesn’t the FT have a fact checker?

This is from the original China Daily story from 2011:

Since 2003, 72 billionaires in the Chinese mainland have died an unnatural death, the Changchun-based New Culture News reported Friday.. .

Among the 72 billionaires, 15 were murdered, 17 committed suicide, seven died from accidents, 14 were executed according to the law and 19 died from diseases.

There were approximately 60,000 people with 100 million yuan in the Chinese mainland at the end of 2010, according to the GroupM Knowledge – Hurun Wealth Report 2011.

So all of this comes from the obscure New Culture News. Let’s take a closer look.

The first problem is that Forbes refers to the fact that in 2011 China had 115 US dollar billionaires, whereas the New Culture News is referring to yuan billionaires. A billion yuan is more like 150 million US dollars.

The second problem is that the article cites the fact that back in 2011 there were 60,000 people with 100 million in wealth. But 100 million yuan is not a billion. The most likely explanation for this discrepancy is that round numbers are defined differently in China. In the West, a thousand, a million, and a billion are considered focal points. In China the basic units are a hundred (bai), ten thousand (wan), and a hundred million (yi). A Chinese newspaper aimed at a local audience would be unlikely to use the term “billionaire” unless perhaps referring to a Western concept, like US dollar billionaires. Certainly not for a wealthy Chinese person.

So they are almost certainly referring to people with a net worth of at least $15,000,000. And 72 premature deaths among 60,000 people is much less shocking that 72 deaths among 187 people (leaving 115 survivors.)

Think about this logically. Does it really seem likely that 72 of 187 Chinese dollar billionaires would have suffered premature deaths in a brief period of time and only the “New Culture News” would have noticed the problem? These people are celebrities, and their lifestyles are widely reported on both in and out of China.

In fact, the Chinese new story is almost useless. It’s not clear that a single Chinese US dollar billionaire has suffered a premature death. I suspect a few have, as China occasionally executes a businessman for corruption. But the article cited by both Forbes and the FT doesn’t tell us anything useful.

PS. I’d like to thank my wife for help with the Chinese numbering system.

HT: Jordan Schneider


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Scott Sumner
Scott B. Sumner is Research Fellow at the Independent Institute, the Director of the Program on Monetary Policy at the Mercatus Center at George Mason University and an economist who teaches at Bentley University in Waltham, Massachusetts. His economics blog, The Money Illusion, popularized the idea of nominal GDP targeting, which says that the Fed should target nominal GDP—i.e., real GDP growth plus the rate of inflation—to better "induce the correct level of business investment".

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